Western Australia is going through what the government says is its biggest spend on social housing in history, with $2.6 billion being poured into homelessness services and 4,000 social homes.
To put that in a bit of perspective, it cost $1.6 billion to build Perth Stadium.
It's a strong commitment to reducing the public housing waitlist which has remained stubbornly high for a long time.
But it means that, on average, each social home is costing the state around $650,000.
At a time when the average cost to build a home in the private sector is $403,494, why the big difference? And is the state government getting bang for its buck?
What's being done?
The simple answer is social housing is complicated, and the costs can vary significantly depending on what exactly the government is doing and who it's trying to accommodate.
At the end of February, the public housing waitlist was 18,963 applications long, representing 33,884 Western Australians.
For some, the government will be able to use its $105.1 million spot purchasing fund to buy a home that's currently on the market and bring it into the social housing pool.
When the 2022-23 fund was topped up late last year, the government hoped to buy at least 270 homes – making the average cost around $389,259 each.
At that point, 126 homes had been bought.
Of course, the actual cost of each home will vary depending on the usual market factors, including borrowing rates and construction costs.
"We look at the market, we look at the location, we still want to get value for money," Housing Minister John Carey told the ABC.
"This isn't just a simple free-for-all."
Government partnership with Housing Choices
Another way the government can stretch its dollar further is to partner with community housing organisations – which can often also bring in money from super funds and other sources.
One of the most recent examples was announced in November and will see 100 social homes added to the system at an average cost to the government of just $207,000 each.
Under the arrangement, the state government only needs to buy 50 of those homes with an organisation called Housing Choices buying the other 50.
The government will then pay for Housing Choices to deliver what's called a "supported landlord" model to provide the help people coming out of rough sleeping need to stay in a home.
Two rounds of post-COVID grants given to housing providers achieved similar results, with $79 million of government money delivering 320 homes – equating to around $246,875 each.
But at the end of the day, those two options can't solve all of the government's problems.
Build, build, build
Being in competition with the private sector too creates obvious problems, and there's only so much capacity among community housing organisations to tap into.
The other option then is to build.
In recent years the government has tried new ways to reduce the cost of building while speeding up the time it takes to deliver – by using things like modular or timber-frame homes.
But even with those efforts, there's little getting around the high prices that come with a heated construction market.
"It's about the location, it's about the size of the dwelling, it's about the type of build and also about trade availability and materials," Mr Carey said.
That's why the most expensive social housing projects always involve building – like the $400 million announcement this week which will add 700 new homes at an average price of $571,429 each.
Those homes could either be purchased or built, depending on what the government decides.
Location will dictate costs
The housing minister's office told the ABC about 80 per cent of social housing demand is for one- or two-bedroom homes, which would be able to be built for closer to the normal market price.
What makes things more expensive though is when larger homes have to be built or homes need to be constructed in regional areas.
In some cases, it could mean a four-bedroom home in a regional community costs upwards of a million dollars because of higher labour and material costs.
"It makes common sense that if we're building a two-by-one in Broome, that's going to be more expensive than say, a house in Treeby," Mr Carey said.
"It's not just about building in metro areas, it's understanding that we need a diversity of social housing across Western Australia, particularly it is important for regional and remote communities.
"If we're committed to closing the gap and providing housing to Aboriginal people living in remote communities then there is obviously a far greater cost than building something that is very accessible and easy to get to in a metro area.
"We are trying to get social housing integrated across communities and also in regional and remote areas."
Is it enough homes?
Whether WA is building enough social housing is a separate issue altogether.
Adding 4,000 homes over just a few years is quite a big contribution, and has been welcomed by the sector, but it still pales in comparison to the waitlist.
That's part of the reason a new report from the Bankwest Curtin Economic Centre, released today, called for at least 900 social homes to be built each year.
"While it is encouraging to see the state government is implementing a large-scale program of social housing investment … there remains a chronic undersupply of social housing," it reads.
Its authors called for 900 new social homes to be added to the system each year, at an estimated cost of half a billion dollars.
"We're working towards that figure. We should deliver around 700 homes this financial year," Mr Carey said.
"Everyone understands that it's very difficult to get a tradie in the private sector and the public sector is no different."
One of the report's authors, Steven Rowley, said while costly, keeping up with social housing demand was far cheaper than the alternative.
"The cost of homelessness is extraordinary," he said.
"The support services required to keep people off the streets are very, very expensive.
"It [housing] does provide the basis for people to improve their lives and go on and enter the workforce."
The Housing Affordability in Western Australia report also encouraged the state government to use social housing as a way to help keep the construction industry busy when the private sector dropped off, something the government said this week's $400 million announcement would address.
